September 2023 The Staff of Jefferson Medical Services has estimated the following net cash
2024 Accounting Question Assignment Help
The Staff of Jefferson Medical Services has estimated the following net cash 2023
The Staff of Jefferson Medical Services has estimated the following net cash flows for a food services operation that it may open in its outpatient clinic: Year Expected net cash flow 0 ($100,000) 1 30,000 2 30,000 3 30,000 4 30,000 5 30,000 5(salvage value) 20,000 The Year o cash flow is the net investment outlay, while the final amount is the terminal cash flow. (The clinic is expected to move to a new building in five years.) All other flows represent net operating cash flows. Jefferson’s corporate cost of capital is 10%. a. What is the project’s IRR?? b. Assuming the project has average risk, what us its NPV?? c. Now assuming that operating cash flows in Year 1 through 5 could be as low as $20,000 or as high as $40,000. Furthermore, the salvage value cash flow at the end of Year 5 could be as low as $0 or as high as $30,000. What is the worst case and best case IRR?? The worst case and best case NPV?